Inter-Citic Minerals Inc. (TSX: ICI; US OTC: ICMTF)

TSX-Listed Canadian Gold Explorer Now
Moving Towards Production With One of the
Largest Undeveloped Gold Resources in China.

Startling Undervalued Opportunity
For North American Investors.

With a highly positive, independent Scoping Study now in hand, Inter-Citic's current exploration program, announced September 8, is anticipated to bring major market recognition, and serve as a boon for shareholders.

• Inter-Citic's Dachang Gold Project in western China is an open-pittable resource averaging +3 g/t gold. This is rare and exciting in the gold mining world. It's potentially highly profitable, and quick to move into production. Initial production scheduled for just 2-1/2 years from now.
• Independent Scoping Study highly positive: At $800/oz. gold, IRR of 47%, NAV5 of $241 million (approx. 4x current market cap), payback of total US$104 million capex in less than 2 years, producing approx. 165,000 oz. gold/year for 9 years.
• Company valued at just $21/oz. today (market cap/total resource), less than one-third the $68/oz average for other advanced-exploration/development-stage gold companies according to Canaccord Adams Research in their most recent industry report dated September 22, 2009. Based on peer comparables, this is a highly underappreciated situation. Market perception may lag, but it's not blind!
• Inter-Citic moving directly to full feasibility with the hiring of Malcolm Swallow, industry-recognized mine-builder. Mr. Swallow was responsible for the construction of the Mount Polley Mine for Imperial Metals Corporation, which is an open-pit gold-copper mine in British Columbia that came in four months ahead of schedule and 10% under budget.
• Best of all, the company is now rapidly forging ahead to dramatically expand the defined resource. We fully expect the upcoming feasibility study to outline a significantly larger mineable resource with substantially greater annual production rates and a truly outstanding IRR. For more on this, see below.
• You don't need to take our word about the potential of Inter-Citic. Here are several recent statements from wholly independent and highly qualified mining analysts who understand this emerging situation, including statements from Lawrence Roulston, Catherine Gignac, Louis James and Haytham Hodaly: click through here.

Dear Reader,

Inter-Citic Minerals Inc. (TSX: ICI, US OTC: ICMTF) makes a compelling opportunity for today's gold stock investor. Now, with the independent Scoping Study completed and released in July on the company's 83%-controlled Dachang Gold Project in western China, the project is far better understood than before. In this report, we describe the Dachang Gold Project, and the opportunity we see unfolding as the company announces results from its three major exploration programs now underway.

Scoping Study Results

The highlights are noted above. Now let's pace out the particulars of the company, its large gold project and the momentum that's being achieved here. The Scoping Study, also known as a Preliminary Economic Assessment, or PEA, envisions an open-pit mine delivering 2 million tonnes of ore per year to a fully integrated flotation, Biox® and carbon-in-leach circuit which produces Doré, or high-purity gold bars for sale.

The Scoping Study was prepared by qualified, experienced, independent engineering consulting groups, including Micon International Co. Ltd., which prepared the resource estimate.

Highlights of the study include:

• At a gold price of US$750/oz., the Dachang project is estimated to generate an after-tax internal rate of return (IRR) above 40%, and an after-tax project Net Present Value (NPV5) at a 5% discount rate of approx. US$198 million.
• At a gold price of US$800/oz., the after-tax IRR increases to 47% and NPV increases to US$241 million. As you can see, the returns from the project are highly sensitive to the price of gold.
• Total gold production of approx. 1.5 million oz. is forecast to be generated during a mine life of approx. nine years. This is interesting because the total resource in the Dachang Main Zone is already more than 2.5 mil. oz. Management reports that pit optimization in ensuing technical reports will potentially add significantly to the total ounces to be produced.
• Estimated mine site cash operating costs are projected to average US$404/oz. and project capital cost is forecast to be US$104 million. The average grade of the ore is 3 grams/tonne. Yes, an open-pittable resource grading +3 g/t.
• Current Estimated Measured and Indicated mineral resources of 12.4 million tonnes grading 3.37 g/t gold or 1.34 million oz. contained gold. Estimated Inferred mineral resources of 14.3 million tonnes grading 3.31 g/t gold, or 1.52 million oz. contained gold.

Current Exploration Program

Inter-Citic management has engineered the current exploration program to greatly improve on the results from this initial strong Scoping Study. And the company's2009 diamond drill program is well underway.

• Up to 10,000 meters of drilling is planned on the Dachang Main Zone, directed towards converting the remaining Inferred resource in the DMZ (1.14 million oz.) to the M&I category.
• In addition, another 10,000 meters of drilling addresses previously identified gold targets, with the aim of increasing total gold mineral resources.
• The company also has an extensive exploration trenching program of 10,000 meters across previously identified gold soil anomalies with a view to create additional areas to expand gold resources. Trenching has proven the most consistently reliable and cost-effective tool to discover near-surface gold and new drill targets at Dachang.

Assays from drilling results are anticipated to start being reported any day now from this advanced exploration campaign.

Here's what's so compelling: This year's exploration program is designed to blow the doors wide open on this project and add tremendous value over the next six months. The unusually large gold discovery at Dachang is just starting to get delineated, and the company has already identified 2.85 million oz. gold (1.34 million oz. measured and indicated, 1.51 million oz. inferred).

1. The scoping study shows a production level of 165,000 oz. gold/year for nine years (total production of approx. 1.5 million oz.). But with further expansion of the resource, with bringing much of the inferred resource up to the M&I level and with delineation drilling that helps to optimize the pit design, management is targeting much higher production levels with the next technical report. With a marginal value of more than $100 per ounce produced – assuming that gold averages just $800/oz. over the life of the mine – today's expansion program is expected to add significant value.
2. As noted above, only 1.5 million oz. of the resource, or just a little over half of the current total resource identified in the scoping study, is to be mined. Management reports that significant optimization of the pit design and mining process remains for the next level of technical report.
3. And what of the other 90% of the property that contains 50 major soil anomalies that invite expansion drilling? The company has initiated 10,000 meters of trenching to identify the next areas for resource expansion drilling in the new year. With 279 sq. km. in the Dachang project area, management has had its hands full trying to get to all the many other areas that demand drilling, and this can start soon.

Here are additional maps and reports that describe Inter-Citic and the Dachang Gold Project, and the opportunity for investors today.

For a property map showing the 4-km. strike length of the Dachang Main Zone, and the 50 soil anomalies throughout the major property, click here.
For a summary of the independent Scoping Study performed by respected Micon International and additional engineering firms, click here for Inter-Citic's news release of July 6, 2009.
For a summary of the company's current exploration program, click here for Inter-Citic's news release dated September 8, 2009.
For the company's current PowerPoint presentation that describes the company and project in much better detail, click through here.
For bios of Inter-Citic's well-qualified management team, including the addition of Malcolm Swallow, the new VP-Operations, click here.

Dachang Gold Project Overview

The Dachang Gold Project is located in Qinghai Province in western China on the southern Qinghai Plateau approximately 170 km. south of Golmud, a regional infrastructure center for the province. This is the same province of China where Eldorado is mining gold at Tanjianshan.

In late 2003, Inter-Citic signed a formal Cooperative Joint Venture Contract with the Qinghai Geological Survey Institute (QGSA) to earn 83%-interest in the Dachang Gold Project. In 2006, ICI completed its earn-in of the 83%. The company can also acquire an additional 7% interest in the JV based on the valuation of any potential mining project contained in a Prefeasibility Report, for a total interest of 90%. In that event, QGSI will retain a carried interest of 10% in the JV.

In 2006, the business license for the Dachang Project was extended for an extraordinary 27 years, to December 6, 2033, one of the longest licenses for a foreign entity in the country.

Importantly, company geologists have found that – because the gold is near-surface – gold-in-soil anomalies and trenching are direct and leading indications of where to drill. And this is remarkable because the entire 279-sq. km. Dachang property – more than 100 square miles– has been tested geochemically in prior years and shows more than 50 zones of strong gold-in-soil anomalies, many of which are being trenched now. (Please see property map in the click-through above.)

ICI has drilled at most 10% of the areas with strong potential at Dachang. In addition, the resource is open to depth.

An Impressive Cast of Supporters

More than a third of Inter-Citic's shares are owned by a small group of influential Chinese families ranked in the tycoon class. Led by Canadian CEO James Moore, members of the Ho and Lee families of Hong Kong also sit on ICI's board of directors. This group gives Inter-Citic strong political and financial recognition in building a platform for successful operations in acquiring and developing large-scale projects in China.

Contributing support at the Advisory Board level, ICI has also assembled a group of industry achievers to advise company directors on key issues. This group includes John N. Turner, P.C., C.C., Q.C., the former Prime Minister of Canada; Harry Burgess, P. Eng., founder of the global engineering consultants Micon International; and Don McKinnon, discoverer of Ontario's famed Hemlo Deposit.

Outlook

It's exciting to present a rare find: a development-stage gold company with a still-unfolding major gold discovery and a modest market valuation. As earlier mentioned, on both a discount-to-net-asset-value basis and on an in-situ gold valuation, ICI is trading at less than one-third its inherent values today. And those values are anticipated to rise dramatically in the ensuing six months with updates from the company's exploration operations at Dachang where five rigs are drilling.

Management believes the company could soon enter the breakout phase of recognition, leading to an attendant strong rerating of the company's values in the near-term.

Start following Inter-Citic now, while the stock is still under $1/share. For more information, call Stephen Lautens, VP Corporate Communications at 905-479-5072, x 227 and visit www.inter-citic.com. Email: ir@inter-citic.com